Item 2.05 Costs Associated with Exit or Disposal Activities.

On December 17, 2008, Silicon Storage Technology, Inc. announced it is implementing a global reorganization to reflect changes in anticipated levels of business. This action is being taken to further reduce costs of operations, to streamline the organization going forward, and to improve focus on expediting selective new products to the marketplace. We will reduce our headcount by approximately 120, or 17 percent of our global workforce and expect most of the reduction to be completed by December 31, 2008. We expect to incur a restructuring charge of approximately $2.8 million, nearly all of which is related to estimated severance costs associated with the workforce reduction.

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